Engineering Services NAICS 541330

May 23, 2026 - House Committee Issues Transportation Funding Proposal

• According to Engineering News-Record, leaders of the House Transportation and Infrastructure Committee released a roughly $580 billion proposal, the BUILD America 250 Act, to guide federal transportation investment through fiscal 2031 after the 2021 Infrastructure Investment and Jobs Act (IIJA) expires. The bill emphasizes formula funding, with more than 90% of highway funds distributed that way, aiming to speed project delivery and give states greater flexibility. Industry groups support the predictability but question whether it preserves IIJA-era funding certainty. About $474.4 billion would come from Highway Trust Fund authority, while $106 billion would rely on future appropriations, according to analysis by law firm Holland & Knight. The proposal would also eliminate some climate programs, add fees on electric vehicles, and raise review thresholds to streamline approvals, while economists caution that private financing cannot replace sustained federal spending.
• The Associated Builders and Contractors (ABC) Construction Backlog Indicator rose by 0.2 months to 8.8 months in April 2026 compared to March. The infrastructure backlog decreased by 0.2 months to 9.9 months in April, from the month before, and the heavy industrial backlog rose by 2.2 months to 9.1 months over the same period. April’s commercial and institutional construction backlog increased 0.1 months to 8.9 months compared to March. The ABC’s Construction Confidence Index for sales rose to 66.2 in April from 64.7 in March. A Confidence Index sales reading of 50 or more indicates most contractors are optimistic about sales. ABC Chief Economist Anirban Basu said that while April backlogs reached a 10-month high, backlog growth is increasingly concentrated among large contractors working on data centers.

• AI adoption is reshaping engineering services as product developers seek faster design iteration, earlier identification of system issues, and scalable engineering knowledge, according to TechRadar. Despite significant investment, many teams struggle to move beyond pilot programs, often because of unrealistic expectations that AI can replace core design tools. Instead, AI is proving most effective as an enhancement to existing CAD and CAE systems, enabling a shift toward “quantitative design,” in which engineers define parameters and let AI generate and evaluate multiple design options. Emerging AI copilots and an added intelligence layer help reduce manual work, improve decision-making, and surface trade-offs earlier in the process. For the engineering services industry, this shift can accelerate project timelines, improve efficiency, and expand design exploration, while preserving the importance of human expertise and judgment in outcomes.
• North American construction and engineering spending on nonbuilding structures is expected to rise about 3% in 2026 after a 3% gain in 2025, according to FMI’s second-quarter 2026 North American Engineering and Construction Outlook. Sewage and waste disposal will lead growth with an 8% increase, supported by treatment upgrades, PFAS compliance, and about $7 billion in Water Infrastructure Finance and Innovation Act (WIFIA) lending capacity. Water supply spending is projected to grow 5% as data centers and industrial demand drive investment in reuse and reclamation. Conservation and development spending is forecast to increase 6%, led by dredging and coastal resilience work tied to US Army Corps of Engineers programs. Power spending is expected to rise 4% as utilities expand transmission and distribution. Highway and street spending is expected to remain flat as Infrastructure Investment and Jobs Act funding matures.